Conducting an external assessment of the performance and quality of work of the bank's internal audit unit

Abstract

The article is devoted to the external assessment of the efficiency and quality of work of the bank's internal audit unit. The war in Ukraine imposes significant restrictions on the functioning of the bank's internal audit, but according to the results of an independent external evaluation, the maturity, significant progress and significant improvement of internal audit functions over the past five years have been noted. It should be noted that there are not enough studies on the chosen topic in the Ukrainian scientific environment, and the need for them is growing every day, since practical actions should be based on a theoretical assessment of events. The purpose of the article is to determine the criteria for evaluating the effectiveness of the internal audit system in banks by revealing the mechanism of its interaction with the National Bank of Ukraine (hereinafter - NBU) and audit firms in conditions of uncertainty during military operations. The article describes the external assessment of internal audit in a commercial bank, which is conducted taking into account the requirements of the Internal Audit Standards. The main regulatory and legal documents of the NBU regarding the external assessment of the effectiveness and quality of work of the bank's internal audit unit were also analyzed. The study highlights the role of the NBU in assessing the quality of work of the bank's internal audit unit. It has been proven that auditing firms conduct an external evaluation of the bank's internal audit work, the legislation does not establish requirements for the independence of the group of experts who conduct the external evaluation, to the persons entered in the Register of auditors and subjects of audit activity. The actions of the external audit by audit firms of the internal audit of the bank were evaluated, namely: whether the transformation procedures in the internal audit bring a positive effect; whether the internal auditors are competent enough to effectively check the bank's processes in the conditions of a constantly changing external environment and the emergence of new risks. Ways to improve the quality of bank management through the streamlining of internal audit functioning mechanisms are proposed, directions for improving the effectiveness of the organization of internal audit audits in the bank to improve the quality of management processes are identified.